Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[schonelucht]

At the current state of technology, "recycling" Li-Ion cells (regardless of CO content) does not include recovering the metals in sufficient purity for reuse in new cells. "Re-cycling" means melting down the cells to produce, among the by-products, an amalgam of the elemental metals that is difficult/un-economical to separate, so it is stored by re-cyclers in anticipation that soon an economical, environmentally benign process (smelting is not) can be developed. Perhaps JB and Redwood Recycling will find a solution.

Investors in Umicore seem to come to that conclusion too.

 

[schonelucht]

Elon Musk
I think that would actually be counterproductive because people read too much into what occurred in a month. I mean, even at a quarterly basis, things can be lumpy. And so the more granularity that’s provided on a monthly level, the few would reach all sorts of conclusions that doesn’t makes sense.... people read that would increase the drama, not decrease it.​

Fine, start disclosing monthly deliveries after smoothing the wave then?

 

[Fact Checking]

The big risk in becoming an insurer (ignoring the significant capital that must be tied up in meeting liquid reserve mandates by each jurisdiction's regulatory regime) is the existential corporate exposure for satisfying bodily injury/wrongful death/ punitive damage awards. (which Tesla currently "self-insures."

So AFAIK the overwhelming majority of carmakers self-insure against that kind of risk - including the financial risk of recalls. (Which is a sort of insurance risk as well.)

Or were VW's and BMW's and Mercedes's recent fines and jury awards paid by insurance companies?

 

[dqd88]

Um.ok. You did keep reading, so when I say polarizing, that would mean there are others on opposite poles, no? ‘Make sure you understand that.’

Gonna spend the weekend thinking on how my opinion, is subjectively not objective.

You said "it's dam ugly" - that implies that you are making what you believe to be a factual statement.
You didn't say "I think it's dam ugly". You said "it is dam ugly"
I think you're way off. Have you studied design or thought deeply about it in your life? I have. I want to know why you feel so emboldened to say something so brash and frankly false.
The reason it slants in the back is to optimize drag coefficient. I also like the utility of a straight back section, but I understand why they are designing it like so.

 

[Anstandswauwau]

According to Zhelko's arguments no way can any company led by Elon ever land orbital rockets on a drone ship ... wait a minute.)

See, that's exactly the point. Elon isn't CEO of SpaceX, he doesn't run its daily business and they're doing just fine (besides recent Crew Dragon's RUD). Why shouldn't this be the case for Tesla, too?

 

[Causalien]

(I like most of Zhelko's comments when they are not about Elon, FWIIW. But his comments about Elon are correct in the 'broken clock' sense in my opinion: Zhelko has been basically non-stop raging against Elon for a long time, which tends to be 'prescient' in hindsight only whenever Elon messes up for real. (Which does happen.) But what's behind it is IMO just venom and dislike of the man, which isn't based on logic and there's no analysis nor predictive power in it AFAICS - he's just assuming bad faith or incompetence from Elon whenever possible. According to Zhelko's arguments no way can any company led by Elon ever land orbital rockets on a drone ship ... wait a minute.)

But this is much better argued in terms of actual arguments and events, such as his recent comment unilaterally blaming Elon and only Elon for the delay in the negotiations with the SEC, which was a SMH moment ...

Zhelko got burned badly because he believed in the 420 tweet and got in on margin. The subsequent flip flop by Elon caused him to lose big. He associates all the loss to Elon's flip flop and him trusting Elon got him to lose a lot of net worth. It is natural for someone to never trust a person again after such a traumatic event.

In real life, if someone borrow money from you but never return it, the normal response of most people is to distrust the person in the future and probably drop them as friends from now on. Now imagine someone doing that but alot of money to you. The response will be stronger.

Which is why I am surprised that TT007 is still a super bull and never said a bad thing about Elon because after today TT007's whole networth probably got wiped out.

 

[Fact Checking]

Tesla Just about any Fortunate 500 company is not the company where you can fundamentally disagree with the CEO and hope to stay on.

FTFY.

You are not really familiar with the corporate culture of really large U.S. companies I suppose? The overwhelming majority of them are command economies in essence.

Tesla is actually refreshingly meritocratic in that sense.

Maybe that's part of why the full financial and legal executive team revolved the last 6 months.

So Deepak Ahuja coming back from retirement and going back to retirement is your example of 'revolving door'?

Most of the executive drain is due to two factors:

• Tesla executives being in high demand. A fault of Elon I'm sure.
  
• Stock price stagnant for 4-5 years doesn't help the value of stock option awards, which is a significant portion of high level employee compensation. (In particular the last general counsel who left managed to sign up at around ~$350 levels, which made his stock options effectively worthless in terms of ongoing compensation.)

 

[Fact Checking]

Elon isn't CEO of SpaceX

You should really ask SpaceX to update their website:

Elon Musk

"Elon Musk leads Space Exploration Technologies (SpaceX), where he oversees the development and manufacturing of advanced rockets and spacecraft for missions to and beyond Earth orbit."​

Looks like 52-week lows turned this into Bash-Elon-Week. By most accounts Elon is much more involved with SpaceX's engineering and strategic decisions than many other CEOs. The whole reusable rockets idea wouldn't have happened without him.

I.e. you are just repeating the TSLAQ argument that tries to marginalize Elon's involvement with SpaceX, in an attempt to isolate him and pin only the failures on him, never credit him for successes. That's intellectually dishonest.

 

[schonelucht]

Eh? Where can I find this in the reports? I kind of just gave up the fight on this after the merge vote is completed. One of those "nothing you can do now" thing.

True, nothin we can do about it. But I have this vain hope that knowledge of the past may help me avoid making mistakes in the future. Anyway, just look under "Net income (loss) attributable to non-controlling interests" on the PL statement and "Net cash flows from noncontrolling interests - Solar" on the cash flow statement.

 

[Fact Checking]

Fine, start disclosing monthly deliveries after smoothing the wave then?

This will be risky as long as Tesla is targeting high growth: the YoY or QoQ fluctuations will always be large in relative terms, and will be easy to mislead about.

In a couple of years I suspect they might release monthly numbers, once they are in the 10m units/year range and growth slows down.

 

[schonelucht]

Most of the executive drain is due to two factors:

• Tesla executives being in high demand. A fault of Elon I'm sure.
  
• Stock price stagnant for 4-5 years doesn't help the value of stock option awards, which is a significant portion of high level employee compensation. (In particular the last general counsel who left managed to sign up at around ~$350 levels, which made his stock options effectively worthless in terms of ongoing compensation.)

Look, I know you are heavily invested in the whole "Elon tweeted nothing wrong" idea, but even then you should acknowledge that the guy resigning a mere 6 hours after a tweet that made SEC file again is not coincidence? Also, if so many higher executives are convinced that their stock options that don't expire for another two-three-four years are effectively worthless, why would any retail investor stay long in Tesla at this point over that same time period?

 

[mrdoubleb]

Look, I know you are heavily invested in the whole "Elon tweeted nothing wrong" idea, but even then you should acknowledge that the guy resigning a mere 6 hours after a tweet that made SEC file again is not coincidence? Also, if so many higher executives are convinced that their stock options that don't expire for another two-three-four years are effectively worthless, why would any retail investor stay long in Tesla at this point over that same time period?

I`m sorry, I may have missed that. How do we know he resigned 6 hours after the Tweet?

 

[PANN]

Zhelko got burned badly because he believed in the 420 tweet and got in on margin. The subsequent flip flop by Elon caused him to lose big. He associates all the loss to Elon's flip flop and him trusting Elon got him to lose a lot of net worth. It is natural for someone to never trust a person again after such a traumatic event.

Frankly, for the past 3 years that I've been following Tesla/Elon, I think the 420 tweet is the only thing that Elon owe retail investors an apology, actually not the 420 tweet itself, but the following tweets such as "Only reason why this is not certain is that it’s contingent on a shareholder vote." Just say the word and we will all forgive

Everything else including the recent Q1 screw-up is understandable and Elon deserve no blames.

 

[Artful Dodger]

It sounds like each production line they build from here on out will become more efficient than the last, but I am wondering how long it will take until they reach a similar efficiency to the traditional car manufacturers. As I understand it, they are still well behind them even with the model 3 at this point. Using info from Troy (Teslike), model 3 production in terms of vehicles produced per employee per year is at 64% compared with the original NUMMI factory. Maybe once they produce the cells and packs in the same building as the cars, the efficiency will take a big jump forward.

Lol, Tesla is massively vertically integrated. They even make their own seats. The other major manufacturer's are mostly GA lines plus an engine line. Compare apples to watermelon.

Cheers!

 

[mrdoubleb]

This will be risky as long as Tesla is targeting high growth: the YoY or QoQ fluctuations will always be large in relative terms, and will be easy to mislead about.

In a couple of years I suspect they might release monthly numbers, once they are in the 10m units/year range and growth slows down.

Just to chip in... GM is also moving to quarterly disclosures and many car companies who do monthly e.g. do it on a high level, all or several model lines combined which blurs the picture when they have 57+ models. Every time i was trying to pull some official statistics on German premium sales from their ERs I found things were blended within product families, or only global vs regional etc. So every automaker tries to selectively provide the information.

Having said that, the reason why I am sort of disagreeing with Tesla`s decision to avoid monthly disclosures is because this is effectively a communications problem and an asymmetric war. Whoever has an agenda to skew info against you and put things in a bad light will find the way anyway. A key concept in communications is controlling the narrative. By not disclosing the monthly numbers they are not preventing anyone from writing stupid headlines about how their sales have tanked. News sites will find other, less reliable, or even biased sources like the Bloomberg tracker, the InsideEVs estimate or even our own EU data collection and will spin it any way they want to. By not putting out official numbers and using that release to explain them, Tesla is completely surrendering control over the narrative to its adversaries and clickbait headline factories who`d sell their mother for a thousand extra clicks.

 

[Fact Checking]

if so many higher executives are convinced that their stock options that don't expire for another two-three-four years are effectively worthless,

A fair portion of the executive churn were executives who were on board for a while already, so they had vesting schedules and underwater stock options. Not 'worthless' but it certainly makes offers from competing startups that still have a stock option exercise price only barely above $0 compared to any IPO a worthwhile risk to take, especially if there's some nice cash bonus for signing up, right?

I don't say this is the only factor, but it's certainly a factor.

 

[Singer3000]

True, nothin we can do about it. But I have this vain hope that knowledge of the past may help me avoid making mistakes in the future. Anyway, just look under "Net income (loss) attributable to non-controlling interests" on the PL statement and "Net cash flows from noncontrolling interests - Solar" on the cash flow statement.

Sobering thought of the day for those who still think that the SolarCity buy was a smart financial move : second quarter in a row that the solar VIEs tap income from Tesla instead of taking away losses. Oh. And they've been bleeding net cash too for a bit longer.

 

[Fact Checking]

but the following tweets such as "Only reason why this is not certain is that it’s contingent on a shareholder vote."

But that's what it came down on in the end, right? Influential shareholders indicated that they couldn't stay on board and keeping retail was more difficult as well than Elon imagined.

What other reasons were there other than whether shareholders wanted it?

 

[schonelucht]

I`m sorry, I may have missed that. How do we know he resigned 6 hours after the Tweet?

Elon first tweet was on Feb 19th. Shortly thereafter, the committee started the internal review, which must have included Dane. Elon tweeted the clarification after consultation 4 hours later. Resignation of Dane was confirmed by Tesla the next day. My speculation was that the resignation was part of the review process. Technically you are right that the resignation could have happened after the clarification tweet up to a window of 12 hours instead of 6. Doesn't really change anything with regards to the probable causality of the two events.

 

[schonelucht]

View attachment 400849

Yes, this is well known. Tesla captures the ITC tax credits in the very first months/years of the VIE and from then on it bleeds. The lifetime of these things is measured in decades.